Earlier this month, the attorneys general for 46 states as well as the District of Columbia and the territory of Guam signed on to an antitrust lawsuit against Facebook. South Dakota, South Carolina, Alabama and Georgia are the only states to decline joining the lawsuit. Additionally, following a 20-month investigation, the Federal Trade Commission filed its own, separate antitrust lawsuit against Facebook on the same day.
The crux of both lawsuits state that Facebook decided to purchase other companies rather than compete with them. The lawsuits seek to force Facebook to divest itself of both Instagram and WhatsApp, though other relief could come into play as time goes on. The lawsuits are separate because the FTC claims that Facebook has violated federal law while the states are claiming that Facebook has violated their state laws.
WhatsApp isn’t used much in the U.S., but it is extremely valuable. It’s probably the most widely used messaging app in the world, and Facebook Messenger is not far behind. Instagram is used all over the world by mostly younger people. With these three apps, Facebook is in a strong position to stamp out any kind of competition.
The founder of WhatsApp stated that he sold to Facebook because he was afraid Facebook would use it’s position to steer consumers away from his app and onto a clone written and owned by Facebook. Copying functionality is common among competitors. The stories feature that is so popular on Instagram originally started on SnapChat. And while SnapChat is still around, its number of users pales in comparison to Instagram.
Litigation like this takes a long time. We’re probably not going to see the results of these cases until after 2021. If you want to know how long this might take you can look to the past. This isn’t the first time a tech company has been taken to court for antitrust violations.
Microsoft was hit with an antitrust case back in the late 90s. That case was litigated for three years, and in 2001, after a change in the presidency, the case was ostensibly dropped, with Microsoft making some small concessions. Though I doubt that will happen when President-elect Joe Biden takes office.
A decade prior in the early 80s, Bell System was hit with an antitrust lawsuit and was forced to split into several different companies. You would probably know Bell System better as AT&T. By the 1980s, Bell System had an effective monopoly on telephone services in most major cities in the U.S. Today, three major companies have emerged from that breakup, AT&T, Verizon and CenturyLink. Though many of the Bell companies remerged with their counterparts, the effect of the breakup was an overall positive one.
I don’t know how the Facebook antitrust lawsuits will end, or when. But a number of employees aren’t waiting around to find out. In the weeks since the election, a number of prominent employees responsible for curbing violence and hate on the platform have left, stating that Facebook isn’t doing enough.
Those of you who rely upon or like Facebook need not worry about it. For better or worse, Facebook is here to stay. The results of these lawsuits will determine if it’s our only option.
